Financial Institutions Reform, Recovery and Enforcement Act of 1989

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The Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s. It established the Resolution Trust Corporation (RTC) to close hundreds of insolvent thrifts and provided funds pay out insurance to their depositors. It moved thrift regulatory authority from the Federal Home Loan Bank Board to the Office of Thrift Supervision (OTS) (within the United States Department of the Treasury) to regulate thrifts.

1 Deposit insurance
2 Other regulations
3 Appraisal standards
4 External links
5 References

[edit] Deposit insurance

FIRREA created two new deposit insurance funds. It abolished the Federal Savings and Loan Insurance Corporation (FSLIC); the fund originially administered by FSLIC became the Savings Association Insurance Fund (SAIF). It also created the Bank Insurance Fund (BIF). Both of these funds were to be administered by the Federal Deposit Insurance Corporation. This section of FIRREA was amended by the Federal Deposit Insurance Reform Act of 2005, which consolidated the two funds.

[edit] Other regulations

FIRREA allowed bank holding companies to acquire thrifts. It established new regulations for real estate appraisals. In addition, the Act established Appraisal Subcommittee (ASC) within the Examination Council of the Federal Financial Institutions Examination Council.

It also established new capital reserve requirements.

[edit] Appraisal standards

Title XI of FIRREA empowered federal mortgage regualtors to adopt standards for real estate appraisal and promulgate licensing requirements to the states. To accomplish this, the Appraisal Subcommittee (ASC) was formed, with representatives from the various Federal mortgage regulatory agencies. The ASC provides oversight and input to the Appraisal Foundation, which in turn promulgates the Uniform Standards of Professional Appraisal Practice and the minimum standards for appraisal licensure^[1].